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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Freedom Holding Corp. (XNAS:FRHC) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
FRHC
Name:
FREEDOM HOLDING CORP. (XNAS:FRHC)
Sector:
- 73703.00K
Industry:
Capital Markets
CEO:
Mr. Timur Turlov
Total Employees:
2,810
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -39.22% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF FREEDOM HOLDING CORP.(FRHC) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND CAPITAL MARKETS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
56.07
One Month Price Target:
$56.44
Six Month Price Target :
$58.27
Likely Price in One Year's Time:
Ticker:
$60.47
Likely Trading Range Today Under (Normal Volatility)
$55.97
Price Upper limit ($) :
$56.42
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$53.48
This week:
$50.28
This month :
$44.49
Other Primary facts
Market Cap:
3.27B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
59.54M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
17.43%
-8.99%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$68.05
$62.32
$44.09
$49.82
Medium risk (<10%) entry points
Buy Call
Sell Call
$60.45
Buy Put:
Sell Put:
$59.23
$51.67
$52.91
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
FRHC
Sharpe Ratio:
9.17%
Comparison:
FRHC, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 162.37% higher than the industry
& ratio is 302.23% higher than the market/S&P 500 average
Average Returns/Yield of
FRHC
Daily returns:
0.23%
Weekly returns:
1.13%
Monthly returns:
4.50%
Yearly returns:
25.05%
Comparison of returns:
Average annual returns/yield (last 3 years) is 115.64% above industry average
Classification:
FRHC, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.02
Statistical test of Returns:
FRHC has yielded a higher return than the market, the results are statistically significant
Volatility (measured by Standard Deviation)
Daily Volatility:
2.36%
Weekly Volatility:
5.27%
Monthly Volatility:
10.55%
Yearly Volatility:
36.54%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.81%
Volatility in last five trading days has been -65.66% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.62%
Weekly VaR:
-10.33%
Monthly VaR:
-20.66%
How Much Can the price of
FRHC
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-16%
Worst case (decline):
-71.56%
This translates to price declining to:
$47.28
This translates to price declining to:
$15.95
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
FRHC is a 45.80% riskier investment compared to the market/S&P 500 & is 24.90% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -14.15% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
FRHC
Beta in relation to market/S&P 500--1.17
Expected beta in 1 year's time:
0.882
Expected beta in 3 year's time:
1.248
Unlevered (debt free) Beta:
0.966
Beta in relation to Nasdaq (XNAS):
0.725
Beta in relation to all global stocks::
0.403
Beta Comparison & Analysis
Beta of competitors/peers::
1.036
Beta is 12.82% higher than peers
Average Industry Beta:
1.144
Beta is 2.12% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
70.67%
Sustainable growth rate is 207.89% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.429
Alpha is 204.81% above industry average alpha yield
Alpha is 2729% higher than market/& is unsustainably high
Analysis of Cost of Capital of
FRHC
Equity cost of capital:
0.112
Equity cost of capital is 1.51% above industry mean WACC
Unlevered (without debt) cost of capital:
9.22%
Before-tax cost of debt:
9.84%
After-tax cost of debt:
7.77%
Overall debt rating:
Non-investment grade (junk/speculative grade
Weighted average cost of capital (WACC):
7.77%
WACC is 5.57% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$7.34
Revenue growth rate per share of (3Y):
10.03
Annual revenue growth rate is 665.57% above the industry average
EPS:
$0.12
Expected Annual growth rate of EPS (3Y):
269.63%
Expected future EPS growth rate is 413.69% higher than the Capital Markets industry
Free cash flow (FCF) per share:
-
-
-
Debt per share
$1.32
EBITDA per share
$6.78
Valuation Analysis Today of
FRHC
P/E Ratio:
15.17
P/E Ratio of Competitors/Peers:
12.47
P/E ratio is 21.66% higher than main peers & is -24.12% lower than the industry
Stock price/value with industry average P/E ratio: $2.40
FRHC is 2236.95% overvalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
7.64
Price to sales ratio is 78.22% above the industry mean
P/B (Price to book value ratio):
10.03
-
-
Net income growth rate (3Y):
635.34%
Net income growth rate is -625.69% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
23.58%
Net debt to equity ratio:
-45.65%
Debt to assets ratio:
3.71%
Net debt to assets ratio:
-7.18%
Debt-to-asset ratio is -95.00% below industry average
Ability to repay debt:
Interest coverage ratio:
7.87
Interest coverage ratio is -84.59% less than industry average
Looking forward:
Debt growth rate:
279.42%
Annual debt growth is 1169% higher than industry average debt growth rate
Debt repayment rate in last quarter: 11.36%
Analysis of Key Statistics
Correlation of price movement with the market:
0.521
Statistical significance of correlation:
FRHC has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.637
Stock price is -18.14% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.637
Correlation of price movement with Nasdaq (^IXIC):
-0.039
Covariance of price movement with the market:
-0.053
Kurtosis
5.658
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.776
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
FRHC
Gross Profit Margin Ratio:
270%
Operating Profit Margin Ratio:
90.87%
Operating profit margin is 369.16% higher than the industry
Net Profit Margin Ratio:
270%
Effective Tax Rate:
11.02%
Effective tax rate is -44.53% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
91.90%
Return on equity (ROE) is 277.16% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
14.45%
Return on assets (ROA) is 163.39% higher than the industry
Financial Leverage:
1.0x
Current Ratio:
1.22
Current ratio is -70.99% below industry average
Cash Conversion Cycle (days):
196
Cash conversion cycle is 1034.98% above industry average
The remaining useful life of property plant & equipment is: 5.7 years
Stock based compensation to net income ratio:
0.70%
In-depth Efficiency Analysis
Revenue generated per employee:
155.6K
Each employee generates -92% less revenue than industry average revenue per employee
EBITDA generated per employee:
143.6K
Each employee generates -49% less EBITDA than industry average revenue per employee
Profit generated per employee:
109.4K
Each employee generates -36% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 26.2K
Each employee generates 13% more free cash flow than industry average revenue per employee
Assets/Capital per employee
26.3K
Each employee generates 13% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
FRHC
Calamos Strat Tot Ret (XNAS:CSQ)
FULTON FINANCIAL CORPORATION (XNAS:FULT)
Mr. Cooper Group Inc. (XNAS:COOP)
INDEPENDENT BANK CORP. (XNAS:INDB)
ROOT, INC. (XNAS:ROOT)
WESBANCO, INC. (XNAS:WSBC)
TCBIP
CVB FINANCIAL CORP. (XNAS:CVBF)
FIRST MERCHANTS CORPORATION (XNAS:FRME)
Current Analyst Ratings
Strong buy�0%
Buy�0%
Hold�0%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: -
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
437.16M
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
44.84M
392.20M
-
-
-
-
118.09M
118.09M
22.98M
51.28M
6.70M
403.44M
397.27M
307.43M
345.03M
38.02M
307.43M
Statement of Cash Flow
Date:
Period:
1.31M
Differed Income Tax :
- 2216.00K
Stock Based Compensation :
2.16M
Change in Working Capital :
- 117412.00K
Accounts Receivables:
- 54152.00K
Other Working Capital:
- 122275.00K
Other Non-Cash Items:
- 6542.00K
Net Cash Provided by Operating Activities:
- 70941.00K
Investments in PP&E:
- 2762.00K
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
6/30/21
2022
Q1
674.08M
825.37M
1.50B
134.84M
-
419.05M
2.05B
37.53M
7.89M
9.49M
-
-
19.11M
74.02M
-
2.13B
150.67M
442.49M
21.36M
1.07B
21.36M
1.68B
78.88M
30.98M
112.11M
-
1.79B
58.00K
260.39M
- 32746.0K
106.83M
June 30, 2021 at 6:00:00 AM
162.88M
334.53M
2.13B
-
521.38M
- 152700.0K
-
179.00K
- 2583.00K
- 10105.00K
-
-
-
16.79M
6.69M
23.17M
- 43664.00K
1.09B
1.14B
- 70941.00K
- 2762.00K
- 73703.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
FRHC
2023
2024
2025
2026
2027
$60.77
$44.07
$47.53
$51.26
$55.29